Restitution Claim Against Fiduciaries to Be Heard by Supreme Court

On June 12, 2007, The United States Supreme Court agreed to hear LaRue v. DeWolff, Boberg & Assoc., 06-856, a case in which a court of appeals held that a plan participant could not sustain a claim for restitution under ERISA against fiduciaries of his 401(k) plan.  See 458 F.3d 359 (4th Cir. 2006).  In this case, the plan participant claimed that the fiduciaries had failed to follow his directions regarding investments in his account.  The court of appeals for the 4th Circuit held that the provisions of ERISA relied upon by the plan participant for his claim, 29 U.S.C. § 1132(a)(2) and (3), do not permit individual recovery and the plan participant did not allege any unjust enrichment, self-dealing or unlawful possession that would permit recovery under subsection (3), which is the provision governing equitable relief. 

The Supreme Court's analysis of this matter is likely to be a far reaching decision and should be closely watched.

 

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